If a CEO is buying company stock, it’s often worth taking a closer look. These insiders tend to be way ahead of analysts and portfolio managers when it comes to the performance of their companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large CEO purchase at GXO Logistics Inc (GXO:US). GXO is an American logistics company that operates globally. Its services include warehousing and distribution, order fulfillment, e-commerce and reverse logistics, and other supply chain services to deliver technology-enabled, customized solutions. The company is listed on the New York Stock Exchange and currently has a market cap of approximately $5.14 billion.
Insider Buying at GXO Logistics
Our data shows that on November 25, GXO CEO Malcolm Wilson participated in legal insider trading by his purchase of 4,174 shares at a price of $43.97 per share. This trade cost the insider $183,531 and increased his holding to 45,509 shares.
Mr. Wilson has over three decades of experience in the logistics industry. Prior to the formation of GXO, he served as CEO of XPO Logistics Europe, where he helped the company achieve unprecedented growth and efficiency. Before this, he worked at Norbert Dentressangle, where he grew Norbert’s logistics division to global scale. Given his background, he is likely to have an excellent understanding of his company’s prospects.
What’s interesting here is that Mr. Wilson’s purchase represents the first stock purchase from an insider at GXO since the company’s formation in August 2021. In other words, insider buys here are not common.
GXO recently posted solid Q3 results that were ahead of analysts’ forecasts.
For the quarter, revenue came in at $2.3 billion, up 16% year over year (organic growth of 16%). This represented its highest-ever quarterly revenue. Adjusted earnings per share were $0.75, comfortably above the consensus forecast of $0.69 per share.
On the back of these results, the company reiterated its full-year guidance of 12-16% organic growth.
Looking ahead, management was confident about the future. “We look forward to closing out the year on a high note, with expected topline and margin growth,” said Mr. Wilson. “We are confident for 2023 and expect to deliver notable growth. Our global pipeline is strong, our conversion rates remain high, and demand for the types of technology we provide is only accelerating,” he added.
In light of these results, and the fact that the stock is down about 50% this year, we see the insider buying here as a bullish indicator.
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